Contracting System Needs a Tune-Up

The United States government is the biggest spender in the world, spending more than $500 billion for goods and services in both fiscal year 2008 and 2009.

For many years taxpayers have held the perception that the federal government doesn't know what to buy or how to buy it.

The resulting sentiment is that government purchases of goods and services are prone to waste, fraud, and abuse.

It's unfair to say that those reactions encompass all government procurement decisions and expenditures, but over the years, Uncle Sam has provided taxpayers with some genuine cause for concern.

Although acquisition reform was intended to make the federal buying system more efficient and hassle-free, the result was a buying system built for speed but without the pit crew to keep it on the track.

We have witnessed an explosion in contract spending, and an acquisition workforce that hasn't kept pace.

The contracting industry has said that the acquisition workforce is the problem.

While POGO thinks this is only one of many challenges facing the government, industry is right to say it is a problem that must be addressed immediately.

Acquisition problems, however, are greater than a human resources matter.

A system that lacks detailed market research, well-defined requirements, appropriate cost or pricing data, low-risk contracting vehicles, and appropriate staffing is a system that is doomed to failure.

Another bump in the road has been the political side of the contracting system.

For example, Congress appropriates and authorizes the spending of taxpayer dollars; contractors and their lobbyists line up to influence congressional and executive branch decisions; and agency contracting and program staff are restricted by time or political mandates.

We are slow to learn that campaign contributions, politics, influence, contracting, and spending taxpayer dollars creates a complex system that often times runs like a lemon rather than like a fine-tuned machine.

This summer's debate over the F-22 provides a great example of a system that isn't running on all cylinders.

Despite opposition from two Presidents, two Secretaries of Defense, three Chairmen of the Joint Chiefs of Staff, and the current Secretary and Chief of Staff of the Air Force, congressional leaders from states with the most to lose nearly won in their efforts to make the Air Force buy seven unwanted and unneeded F-22 Raptors -- to the tune of $1.75 billion and at the expense of other, more important strategic needs.

Although one of the advertised benefits of acquisition reform was to increase competition by luring nontraditional contractors, we have seen a differing result.

Merger-mania has been commonplace, and in many industries it has placed a stranglehold on competition.

The government now turns to a tiny cadre of contractors for everything from the latest military weaponry to civilian computer and management services. The top 100 federal contractors receive nearly 60 percent of federal contract award dollars.

As a result, the government isn't maximizing genuine competition that often results in increased innovation and cost savings.

Contracting processes are also at fault for a broken-down acquisition system.

Government reports continually highlight poor requirements definitions, outside-the-scope contracts, negligent designation of commercial items, poor performance, and programs that are over budget and behind schedule.

The Department of Homeland Security's Deepwater program was not only financially wasteful, but also drew attention to the fact that the government often over-relies on the private sector to sway what it buys, how it buys, and, in some extreme cases, to manage the program.

A final example that illustrates just how little control the government has over its buying habits is the predatory purchase card program.

Government purchase cards have been used to buy such things as escort services and a much-publicized breast implant operation.

Although many improvements have been made to this essential program, it is amazing that so much wasteful spending occurred for years.

I have sat in on many congressional hearings, committee meetings, and panel discussions that label the numerous acquisition missteps as a "cost of doing business."

In fact, it wasn't until the wars in Iraq and Afghanistan and Hurricane Katrina that many government officials turned their attention to how and on what the government is spending taxpayers' money.

The government is becoming a better buyer, but it would be a disservice to taxpayers to ignore the fact that further contracting improvements are required.

We need a system that better ensures that federal spending is fair, open, and in the interest of all taxpayers rather than a select few.

The system needs a tune-up to become more reliable and to avoid the contracting junkyard.

Scott Amey is General Counsel at the Project on Government Oversight